Quarterly Settlement of Funds and Securities

As per the exchange circular dated 3rd December, 2009 Settlement of Funds & Securities through Quarterly Settlement is an initiative by SEBI to ensure brokers do not misuse client funds and/or securities. This settlement has to be done once in a period of 90 days and is to be done for both funds and securities of the clients.

Any accounts whose balance is less than Rs. 10,000 (or Rs. 50,000 for MCX) or any account which has not been traded from in that quarter will be exempt from this quarterly settlement, so the funds and/or securities will not be transferred back to the client’s bank account.

What is the quarterly settlement?

Any unutilized sums of money kept in the client’s trading account, needs to be transferred back to the client’s bank account, once every 90 days. Any client securities held by the broker, must be transferred back to the client’s demat account, once every 90 days. These securities such as stocks or MFs could be lying with the broker when they are pledged to trade in the F&O segment or when these securities haven’t been fully paid for by the investor.

To find out more details please refer to the NSE circular.